In the wake of the arrest of two Venezuelan bitcoin miners, some bitcoiners chose to quit or restrict their activities while ordinary Venezuelans flocked to bitcoin.

The first arrest of bitcoin miners in Venezuela and the article published by a state-sponsored news outlet which described bitcoin as a “cybercriminal system” led to two opposite tendencies in Venezuela. On the one hand, members of the bitcoin community panicked and took various steps in an attempt to protect themselves. On the other hand, many Venezuelans learned about bitcoin and decided to try it.

Ironically, an article telling that bitcoin is used for tax evasion, money laundering and subversion provoked an increased interest among Venezuelans. Many people, who never dealt with cryptocurrencies before, started contacting SurBitcoin, the first Venezuelan bitcoin exchange based in New York and run by Americans of Venezuelan origin.

In just a week, the number of customers of SurBitcoin doubled, reaching 90,000 and putting the exchange under double stress: the support was not able to deal with all the requests, and the bank suspicious of a sudden increase in cash inflow, blocked its account.

However, those already implicated in bitcoin economy in the South American country were afraid of possible government repression. The only Venezuelan employee of SurBitcoin, after receiving a subpoena from Sebin, the national secret service, resigned from the company. Various local Facebook bitcoin groups changed their status from public to private or from private to secret. The administrator of one of them published the following message:

“Comrades, to comply with the law, I notify you that from this moment it is only allowed to trade bitcoins for Bolívars and Bolívars for bitcoins, bitcoin being a virtual token or product having such value in Bolívars as the market defines. It is not allowed to trade dollars or use dollar-denominated instruments (PayPal, Neteller etc.); for this end there are other groups such as Bitcoin Panamá where it is legal to trade in dollars. PS: Avoid being expelled from the group. Really, I don’t like it but a cautious soldier stays alive. Any price quotes referring to dollars will be prohibited, prices will be allowed only in Bolívars. Thank you very much for your attention.”

It can be concluded that while bitcoin is not very popular with the Venezuelan government, the US dollar is currently regarded with even greater suspicion.

Alexey Tereshchenko